BSP: PHL may miss DBCC growth goals

THE Philippine economy could miss its growth targets this year due to its weak performance in the second quarter, the global slowdown and high oil prices, according to the Bangko Sentral ng Pilipinas (BSP).

A nother major consideration is the impact of the monetary tightening of the BSP. In August, however, the Monetary Board made a “hawkish pause” with key policy rates being kept at 6.25 percent. (Full story here: https:// businessmirror .com.ph/2023/08/17/bspkeeps-rates-after-q2-growthslowdown/)

B SP said the peak of the impact of the 425-basis-point increase in policy rates will be felt next year.

The BSP started raising interest rates in May 2022 and has been the most aggressive in the region in terms of monetary policy tightening. (https:// businessmirror com.ph/2022/09/15/bsp-mostaggressive-in-hiking-policyrates/)

“ The growth forecasts indicate continued economic expansion, albeit at a slower pace, with projected impact of the BSP’s policy rate adjustments peaking in 2024,” BSP said in its Monetary Policy Report (MPR).

W orld GDP, based on International Monetary Fund (IMF) projections, could average 3 percent in 2023 and 2024 and 3.2 percent in 2025. In its May MPR, BSP said growth could average 2.8 percent in 2023 and 3 percent in 2024.

O il prices are expected to trade higher at $81.9 per barrel in 2023 from the initial estimate of $77.2 per barrel. Dubai crude prices could also trade at $82.3 per barrel in 2024 and $78 per barrel in 2025.

T he BSP also noted “waning pent-up demand” that could contribute to the slowdown in the growth of the Philippine economy this year.

See “BSP,” A2